Brit reports a 5.7% increase in GWP over 2020 despite $232m loss after tax

(Re)insurance business Brit improved its gross written premium (GWP) by 5.7% in the 12 months to 31 December 2020 to reach $2,424.4m compared to $2,293.5m in 2019 - however the firm still reported a loss for last year due to claims linked to the coronavirus pandemic.

These figures were revealed as part of Brit’s year-end financial update, published today.

Overall, the company reported a loss after tax of $232m, versus a profit of $179.9m in 2019. Group chief executive of Brit Matthew Wilson explained that the “financial impact” from the Covid-19 pandemic and related claims “on Brit has been significant”.

Despite this, Brit said that its “balance sheet remains strong”, with $1,436.8m of adjusted net tangible assets, capital surplus of $341m and a capital ratio of 122.1%.

Brit’s net earned premium, excluding the effect of foreign exchange on non-monetary items, was $1,713.9m last year, compared to $1,638.5m in 2019, demonstrating a 4.5% increase.

Risk adjusted premium rate increases on renewal business was 10.6% in 2020 versus 5.9% in 2019 – this brings the total increase since 1 January 2018 to 20.2%.

The firm’s attritional ratio in 2020 was 52.6%, an improvement of 2.4 percentage points, while its combined ratio was 112.6%, compared to 95.8% in 2019 – the firm said this includes 15.9 percentage points of Covid-19 related losses and 7.8 percentage points of other major losses.

Excluding the effect of coronavirus, Brit believes its combined ratio is 96.7%.

Mixed results

Speaking on the results, Wilson said: “Our products are designed to support businesses and individuals in such difficult times and we have focused on responding to claims as they have been notified.

“We have stood tall with respect to valid Covid-19 claims and the financial impact on Brit has been significant. Furthermore, 2020 was also a very active year for catastrophe events, being the fifth-costliest on record.

“Despite the backdrop of Covid-19, there were a number of positives in the period. We achieved risk adjusted rate increases of 10.6%, with almost all classes contributing to the increase. This gives a total overall increase since 1 January 2018 of 20.2%.

“In this positive rate environment, we continued to grow our written premium to $2,424.4m. During the period we also delivered an attritional claims ratio of 52.6%, an improvement of 2.4 percentage points, reflecting underwriting discipline, rigorous risk selection, and rate increases.

“Looking ahead to 2021, against the challenging backdrop there are a number of indicators to give us cause for optimism, including rate increases, the withdrawal of capacity in the market from certain classes and our improving attritional claims ratio.

“In this environment, our clear strategy of embracing [a] data driven underwriting discipline, rigorous risk selection and planned targeted growth for 2021, coupled with innovative capital management solutions and continued investment in distribution, positions us well to respond to the opportunities and challenges ahead.”